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COVID-19

So, your employee wants to stay on unemployment

By Paul Edwards bio

It’s been a few of months of COVID chaos and business owners across America are thinking about what it’s going to take to reopen their businesses—and the economy, in general.

Of course, the first piece of that equation involves recalling your employees who have been temporarily furloughed or laid off. And, since one portion of the CARES Act included an additional $600 per week to anyone collecting unemployment benefits, one common question we’re hearing is, “What if my employees refuse to come back to work because they want to keep collecting unemployment?”

Usually, this question seems to be based on a misunderstanding of how unemployment benefits work. Generally speaking, if your employees refuse work in favor of collecting unemployment benefits, they will likely not be eligible for those benefits. Here’s why:

Unemployment is meant for people who can’t work through no fault of their own.

Unemployment benefits may be available as a temporary replacement for work when you have lost employment or had your hours reduced at no fault of your own. They are generally not provided when viable work is available but refused.

Refusing to work, choosing to take a leave of absence, or resigning from employment when work is available could negatively impact an individual’s ability to receive unemployment benefits. Further, patently refusing to come to work because you would rather receive unemployment benefits can be interpreted as a choice to resign from at-will employment.

A condition of receiving unemployment requires being ready and able to work. 

If you offer work and your employees do not accept that work, you are legally obligated to accurately report these instances on the Unemployment Insurance (UI) claims you receive from your state on behalf of staff members.

Likewise, your employees are also legally obligated to accurately report all information requested of them in their application.

If one or both of you report that you offered an employee hours but they elected not to work, there’s a chance that this will negatively affect their UI eligibility.

Unemployment is often available to individuals who are underemployed.

Reopening does not necessarily mean returning immediately to full capacity. In fact, getting back to “normal” may take some time, and it will likely be further delayed by any economic downturn we face as a result of this crisis even after social distancing guidelines are relaxed.

That said, having your employees come back to work does not necessarily equate to having them kicked off of unemployment benefits. Your employees will simply need to report any income they do receive while they are receiving UI benefits. That income may affect the total payout of that benefit but, so long as your team is not restored to its full workload right off the bat, it may not eliminate it entirely. Your employees may actually be able to continue collecting UI despite working available hours at your business.

Some states even have Work Share programs in place specifically to allow employees to collect partial unemployment when they are forced to work reduced hours.

Unemployment expansion under the CARES Act has its limits.

We should mention here that the guidance in this post is based on the premise that a business can legally reopen and doing so does not go against local orders or applicable industry guidance.

Employees are eligible for UI under the CARES Act if they are “unable to reach the job as a direct result of the COVID-19 public health emergency,” which likely includes being forbidden from going to the office by official order.

That said, along with the $600 weekly “supercharge” to unemployment benefits, the federal government also released guidelines to help states temporarily expand unemployment eligibility to a number of individuals who would not otherwise qualify. This may be partially to blame for employees refusing to work in favor of collecting UI, but anyone who thinks they can lean on those guidelines without a viable reason for their UI claim is sorely mistaken.

States may not adopt all UI expansion guidelines

First, though the feds have been “recommending” states expand UI eligibility in light of the current pandemic, they did not mandate that expansion. As a result, some states have been slow to adopt the expanded guidelines or may not be relying on them at all.

Expansion is intended for those directly impacted by COVID-19

Further, most of the eligibility criteria under the expanded benefits involve being sick with COVID-19, seeking medical diagnosis for COVID-19, having a member of your household contract COVID-19, or facing the closure of your child’s school as a result of COVID-19. The only portion of the law that seems to leave some room for interpretation concerns an employee who “has to quit as a direct result of the COVID-19 public health emergency.”

An employees who “has to quit”

The key here is the phrase “has to quit,” and the burden of proof that your employee “had to quit” as a result of the pandemic is going to be on them. If they decide to quit as a result of COVID-19, this might negatively impact their ability to collect UI. And, what’s more, the Department of Labor has released guidance saying that “quitting work without good cause to obtain additional benefits may be considered fraud.”

Not only will that make them ineligible for benefits now, it might make them ineligible to receive unemployment payments indefinitely. If an employee’s collection of UI payments is deemed fraudulent, they will also need to repay any fraudulent income they may have received and will likely wind up facing a criminal investigation, as well.

If your employee quits due to legitimate workplace safety concerns, however, this may qualify them to collect UI. If you open your business in violation of a local stay-at-home order or industry-specific standards, employees who refuse to work or quit due to legitimate workplace safety concerns, or simply because they cannot legally reach the office, may well qualify for unemployment. Opening too early would also mean subjecting your business and employees to substantial risk.

“Supercharged” unemployment benefits are scheduled to expire.

Though the expansion of unemployment eligibility extends through the end of the year, the additional payments of “supercharged” unemployment benefits are set to expire on July 31, 2020.

This means that, even under the best circumstances, those additional payments will be going away relatively quickly. And, though collecting a comfortable income for doing nothing over the next couple months might seem like a dream come true to some, your employees should know that refusing work now to collect unemployment in the short term will probably not seem like such a good idea when they are later forced to look for work alongside the millions of other people who became unemployed during the pandemic.

How to handle an employee who refuses work.

When bringing your team back to work from a furlough or temporary closure, send a letter, email, or memo informing your employees about your intention to reopen and your proposed timeline for doing so.

Ask them to reach out with any questions or concerns via text or email so that you can keep the conversation on file should you ever need to refer back to it later.

Ask them why they are refusing work.

If an employee refuses to come back to work, it may be for a viable reason. So, you’ll want to ask them “Why?” before doing anything else.

Don’t make any assumptions about why an employee is hesitant to return to work. Ask them to provide you with details, in writing, about why they are unable to return to work as requested. They may need more notice to set up childcare, they may be ill, they may be taking care of an ill family member, they may be worried about their own health, they may be unclear on how unemployment benefits work, etc. It’s important to find out the employee’s motivation for refusing work before you make any further decisions.

Let them know that accepting work is a condition of continued employment.

If your employee cannot return to work on your proposed timeline for a legitimate reason such as illness in their family or the inability to find care for a child, make an effort to work with them to resolve the issue. The employee may be eligible for paid leave under FFCRA. If not, then you may wish to provide them with a furlough extension or a personal leave of absence. In either case, work with the employee to find a mutually agreed upon date for return, provide it to the employee in writing, and have them sign the document for your records.

If they fail to provide you with a reason for refusing to work, if their only reason for refusing to return is receiving UI benefits, or they provide a reason that is not otherwise protected by law, remind them that accepting the work being offered to them is a condition of employment.
Not showing up to work constitutes job abandonment.

In these specific situations, you can let your employees know that refusing to work the hours you offer will be seen as job abandonment, which will be treated as a resignation.

Be clear that you will need to report this to your state unemployment board, and that resigning may negatively affect their ability to collect UI.

Should I call the state unemployment office to inform them?

It’s probably not in your best interest to go out of your way to tell the unemployment office that your employee quit work to stay on UI.

If your state is asking you to fill out forms and respond to ongoing status updates, answer truthfully. But, as to whether you should spend time trying to get through to the state to inform them that you think the employee in question should not be eligible — given the current circumstances, the answer is ,“No.”

It’s the state’s job to determine whether or not an employee is eligible for benefits. Plus, you’ve got an office to open and other employees to worry about. Rest assured that any employee who refuses work now is likely to regret that decision later when they find themselves in an incredibly competitive job market without a stable income, without benefits, and without supercharged unemployment payments.

Conclusion

If your employee is refusing to work because they would rather be collecting unemployment, they probably do not have a clear understanding of how unemployment works.

Being ready and willing to work is a condition of most unemployment programs. Therefore, employees who quit or refuse to work just because they want to stay on unemployment will likely be ineligible for that unemployment and may also be committing fraud.

Make sure you are clear about your expectations when recalling your team, be open to any employee concerns that might come up about going back to work, and document your conversations with employees along the way.

Understand that your state determines unemployment eligibility and that, once you’ve done your part to respond to claims, it’s out of your hands. Your time is best spent looking forward and dealing with the employees who are ready and willing to get back to work rather than focusing on the ones who might be falling by the wayside.


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